Ann Taylor: A Retail Stock at The Right Price

Headed into fall, Ann Taylor shares look well positioned to benefit from the wealth effect that has sent other companies to lofty valuations

U.S. house prices are up 12% over the past year and stocks have gained 16%. That bodes well for spending by investors and homeowners. Stock-pickers have already bid shares of retailers like Home Depot and Tiffany to more than 20 times this year's earnings estimates, versus 15 times for the broad market. For a cheaper way to cash in on the wealth effect, look to Ann Taylor (ticker: ANN), whose clothing skews toward career women in the upper-middle income range, and whose shares go for 15 times earnings.